Pros and Cons
Entrepreneurs are finding
that there are many advantages with home-based businesses which allow
one to increase income and at the same time more easily combine home
and work life.
Increased Income
Managing a home-based business
allows the entrepreneur to make use of existing space in the home
for office space, eliminating the costs of office leases or purchases.
Home-based entrepreneurs no longer feel the need to have impressive
and expensive offices which have been the trademark of corporate America.
Rather, they are turning to more efficient and cost-effective ways
of creating and delivering products and services from their home.
Less overhead costs in
a home-based business can be a profitable boost to the start-up business
as well as the established operation. But home-based businesses still
require a start-up investment and have operating expenses. Such costs
as office leasing, additional utilities, furniture - even parking
- are reduced by the using space in the home.
Lifestyle
Single parent and two-income
families find that the flexibility and convenience of a home-based
business can help them to meet family and professional needs more
effectively. They can strike a more equitable balance between work
and family life.
An increasing number of
Americans, especially those with children, are abandoning the stress
and dangers of metropolitan areas and moving to rural areas in search
of a simpler and safer places to live. While rural areas offer a more
relaxed and peaceful way of life, they seldom offer jobs which provide
adequate income for these new urban immigrants. Armed with education,
experience, and the latest technology, this new group of small town
dwellers are bringing their jobs with them in the form of entrepreneurial
enterprises. Starting and operating a business from home helps them
achieve their goals for flexibility and independence.
The faster-than-a-speeding-bullet
pace of life many experience today makes "time" highly valuable. Running
a home-based business saves hours of commuting time to and from an
office. With the effective management of their time, entrepreneurs
find they can perform a variety of tasks during the time it would
ordinarily take them to get to work.
New Technology
Another force driving the
rapid increase in home-based businesses is the trend in new emerging
business and office technology. Today, home-based entrepreneurs can
communicate, gather data, reach customers, and order supplies from
anywhere in the country through telephones, fax machines, personal
computers and modems, and even satellites. The cost of the new technology
has decreased in recent years, making it affordable even for start-up
businesses. The trend toward easier-to-use software has encouraged
more people to experiment with computers and discover new ways they
themselves can be more productive.
The efficiency of an individual
making use of technology will continue to aid the entrepreneur at
home by limiting the need for additional staff. That increases profitability.
A single personal computer, equipped with a scanner, can scan, file,
edit and fax any piece of paper. Not long ago this kind of activity
required a photocopier, a separate fax machine, in addition to a computer
or word processor. And one would also need the time to rekey the information
from the piece of paper into the computer.
New computer technology
has allowed the home-based entrepreneur to turn a computer into a
typewriter, a calculator, a spreadsheet and ledger, a communications
center, a filing cabinet, a drawing board, even a video tape editor.
Developments like these have greatly reduced the cost of running a
business, particularly at the start-up phase. The benefits of technology
as a money-saver and a time-saver hold especially true for home-based
businesses because equipment and employee costs are less - something
home-based business seldom have a lot of money for.
Experts predict that the
trends toward more powerful software (capable of doing even more)
and a slow drop in the price of these new products as they enter the
marketplace will continue. And that is good news for the home-based
entrepreneur.
Boundaries
and Barriers in Home-based businesses
A business at home can
provide unique opportunities and alternatives for the entrepreneur,
but it also has barriers and challenges which must be managed. As
with any business, a successful and profitable home-based entrepreneurial
venture requires strategy, planning, management, and self-discipline.
Identifying and managing the boundaries and barriers which exist in
a home-based business will make the difference between success and
failure.
Distractions
Experienced entrepreneurs
contend that one of the greatest drawbacks to working at home is the
distractions which take you away from business priorities. A business
requires mental focus and discipline. And the home setting offers
everything from television and yard work to family members and neighbors
which can take you away from your main objectives. Some entrepreneurs
find it difficult to resist the temptation of other tasks or hobbies
when business needs to be done. An office downtown provides a distinctive
break from the relaxation of home to the attention of taking care
of business. So if your home-business will be successful, you must
have self-discipline.
Here are some ideas to
maintain focus on business priorities and avoid the distractions of
working out of your home.
Tips and Techniques
1. Develop well thought
out goals for the business. Write them down and keep them in clear
view at all times.
2. Establish routine
"working hours" for accomplishing tasks and attending to business
details. Stick to business when business needs to be done.
3. Set aside time for
taking breaks during extended work time. Even brief relaxation or
breaks from routine will help keep you from being overly compulsive
with your business, a situation which often results in burnout.
4. If there are certain
activities you enjoy, reward yourself by setting aside the time
to engage in those activities when you have accomplished business
tasks.
5. Establish a small
"advisory" group of other entrepreneurs or experienced business
people who will help you to maintain focus and stay on track. Meet
with them on a regular basis to report your accomplishments and
discuss your strategies. Include your banker and your accountant
in this advisory group.
6. Keep distractions
out of your workspace, such as radios, televisions, or even food.
7. Track your time during
your working hours in 15 minute segments. Make note of what you
were doing during those segments of time and analyze them at the
end of each month. Identify time-wasters and distractions, and develop
solutions to overcome them.
Family Expectations
More time for family is
one of the aims of home-based entrepreneurs. But family expectations
can get in the way. When the family expects errands to be done or
attention be given when important business is at hand, conflict results.
If family members assume that family tasks will be taken care of by
the entrepreneur because he or she is "at home," the business will
suffer. Communication and the clarification of expectations with the
people who share your home life are vital to the life of the business,
to the quality of family life and to the peace of mind of the entrepreneur.
Here are some strategies
used by successful home-based entrepreneurs to keep family expectations
balanced with the needs of the business.
Tips and Techniques
1. Communicate openly
with family members, including spouse and children. Share with them
your goals. Explain how important it is that you accomplish your
goals in a timely manner. Remind them that although you are at home
you are still "going to work."
2. Establish work time
and family time. If you are buried in your home office around the
clock and your family does not get your time and attention, they
may come to resent the business. Maintain a balance. Family support
can be a tremendous asset to an entrepreneur.
3. Share success with
your family. When you achieve goals or make the sale you have been
working on, develop a way to celebrate with them. They will find
it easier to share in the effort if they can share in the success.
4. Develop family guidelines
for responsibilities and tasks which need to be done. Do your share.
Don't use the business as an excuse for not taking responsibility
at home. Schedule your responsibilities so they balance effectively
with the responsibilities of the business.
5. Taking care of young
children can be a full-time job itself. The needs of children can't
be scheduled like business meetings. If you find that you are not
able to accomplish your business tasks while taking care of children,
you may need to hire child care assistance or take them to a daycare
in order to get sufficient work time.
6. Establishing a space
boundary for your business. Communicate clearly with your family
about this boundary. That means things like no going into files,
no using of office equipment, and perhaps no answering of the business
telephone.
Isolation
Independence is the battle
cry of the entrepreneur. But if independence is not managed, it can
turn into isolation. To build and grow a business, you must be connected
to the business environment and to your customers. If entrepreneurs
do not spend sufficient time with customers, colleagues, and the "outside
world," they become less responsive to the needs of the marketplace.
Day-to-day decisions and
problems which arise in business require innovation and fresh insights.
It can become easy to withdraw into the business and lose touch with
a the information, ideas and techniques to develop a successful business.
Stay connected with your
customers and with your industry. Here are some strategies to keeping
yourself from falling into the trap of isolation. Successful entrepreneurs
value the insights and ideas of others. They find the interaction
with customers and colleagues essential to business success.
Tips and Techniques
1. Join local business
groups in your area such as the Chamber of Commerce or economic
development entities. If one is not available in your immediate
area or if you are in a rural setting, travel to the nearest community
to participate in established business groups.
2. If you cannot find
a business or entrepreneurial group in your area, form one. Remember
there are probably other business people like yourself, whether
home-based or not, who appreciate the opportunity to discuss business
ideas and solutions. Almost every business shares this need with
you.
3. Find national or regional
associations for your type of business. Plan to attend trade shows
or conferences for your industry to take advantage of educational
and networking opportunities.
The Association of Home-Based
Businesses can help put you in touch with other home-based entrepreneurs.
See "You Are Not Alone" section at the end of this chapter for the
address and phone number.
4. Face-to-face networking
with others is important. Technology also provides opportunities
for electronic networking through electronic bulletin boards, which
can be accessed with your computer and modem. See "The Small Business
Bookshelf" section of this chapter for a listing of electronic bulletin
boards used by home-based entrepreneurs.
5. Accessing information
through electronic networking or on-line computer services has become
indispensable for today's entrepreneurs. The home-based entrepreneur
can find information available at their fingertips, which used to
require a great deal more travel and time. The Small Business Administration
has an on-line service for small businesses called SBA OnLine. See
"The Small Business Bookshelf" section for more information.
6. Schedule lunches or
appointments with trusted colleagues and current or potential customers
on a regular basis, even if it means you have to drive a considerable
distance to a nearby town once a month or every other week.
The Business Zone
Depending on your type
of business and where you live, there may be zoning requirements or
regulations which may affect your business operation.
Producing food products
for sale requires compliance with state health department regulations
regarding commercial kitchens. If your business creates a potential
environmental hazard, you will have to become aware of any federal
laws and requirements which regulate your activity. Most towns and
cities even have regulations regarding traffic flow or signs which
could be disruptive to residential neighborhoods.
Ignoring regulations, especially
those which are designed to protect public safety, can be costly to
an entrepreneur. A regulatory agency has the authority to stop your
business, and levy fines and penalties for breaking laws and regulations.
Here are some strategies
for keeping your business zone from becoming a twilight zone.
Tips and Techniques
1. Research the regulations
for your area. Contact your local municipal government for neighborhood
regulations and the state government for potential state regulations
which may apply to your business. Ask government officials for assistance
in finding solutions to regulatory problems. Don't abandon your
business idea before you have researched every possible solution
to regulatory problems.
2. If your business creates
a byproduct which could be a hazard to others or the environment,
check out your industry association for potential solutions others
have used to handle the situation. The Environmental Protection
Agency, an agency of the federal government, has guidelines for
the disposal of potentially hazardous materials.
3. The Small Business
Administration can offer guidance in determining who to contact
about regulations and zoning standards. See the "You Are Not Alone"
section for the address and phone number of the Small Business Administration
and other useful organizations to contact.
4. Do your homework.
In the area of regulations and zoning, the development of solutions
to prevent problems is far less costly and disruptive than a lawsuit
or fine.
Home-based businesses have
their barriers and problems, like distractions, family expectations,
isolation, zoning regulations. But problems and challenges are not
unique to any particular business. They are a part of any business.
One of the most important traits of successful entrepreneurs are their
tenacity and determination. Your ability to view barriers as challenges
to be met and problems as opportunities for creating new solutions
shows you have attitude of a true entrepreneur. Successfully dealing
with one problem will give you the confidence to tackle others. Confronting
challenges will season you with valuable experience, not only teaching
you how to overcome future challenges but how to capitalize on your
successes as well.
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